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FIRST UNION ANNOUNCES MERGER AGREEMENT AND ISSUES SECOND QUARTER EARNINGS ESTIMATE

 FIRST UNION ANNOUNCES MERGER AGREEMENT
 AND ISSUES SECOND QUARTER EARNINGS ESTIMATE
 CHARLOTTE, N.C. and GREENVILLE, S.C., June 11 /PRNewswire/ -- First Union Corporation (NYSE: FTU and FTUpr) and its subsidiary, First Union Corporation of South Carolina, have entered into an agreement to acquire South Carolina Federal Corporation (NASDAQ-NMS: SCFB), the parent company of South Carolina Federal Savings Bank. The Columbia-based South Carolina Federal had $917 million in assets and 32 offices statewide as of March 31, 1992. The acquisition will increase First Union's deposit share from 5th to 3rd in South Carolina.
 First Union has agreed to exchange 0.76 shares of its common stock for each share of South Carolina Federal common stock. Based on First Union's closing stock price of $36.75 on June 10, 1992, the transaction is valued at approximately $78.7 million, which represents an exchange value of $27.93 for each South Carolina
Federal share based on that closing stock price. The actual exchange value will be based on First Union's stock price at the time of closing. In connection with the merger, South Carolina Federal has granted First Union an option to acquire up to 19.9 percent of its common stock in certain events.
 First Union also announced today that its second quarter earnings are currently estimated to be in the range of $110 million to $116 million, or 84 to 88 cents per common share. This would compare with earnings of $66 million, or 61 cents per common share, for the second quarter of 1991.
 First Union's second quarter earnings estimate assumes that the economies in the corporation's market areas do not deteriorate, that interest rates do not increase materially, that the net interest margin and fee income growth continue to be strong, that credit quality trends continue to improve and other factors.
 Sid Tate, chairman and chief executive officer of First Union National Bank of South Carolina, and John W. Folsom, president and chief executive officer of South Carolina Federal, jointly announced the merger agreement. "We are extremely fortunate to enter into a partnership with such a financially sound and successful institution," Tate said. "Our combined strengths will amplify our presence in South Carolina -- and should benefit the customers, employees and shareholders of both companies."
 "South Carolina Federal's strengths are in attractive markets that First Union has targeted for growth. Our two branch networks complement each other, giving us the ability to serve our customers with greater convenience and increased service," Folsom said. "First Union will be a strong partner, and they have demonstrated a concern for our staff that I appreciate."
 The transaction, which is to be accounted for as a pooling of interests, is expected to be completed in 1992, subject to approval by regulatory authorities, South Carolina Federal shareholders, and other conditions of
closing. After the first several months of operation, the transaction is not expected to be dilutive to First Union shareholders.
 Following the merger, First Union's deposit share will increase from tenth to third in Columbia, from sixth to second in Rock Hill and from sixth to third in Beaufort County (Hilton Head). First Union will also strengthen its presence in Charleston, Orangeburg and Florence and enter new communities including the cities of Beaufort, Cayce, Fort Mill, Hartsville, Manning and Sumter.
 As a result of the economies of scale that are possible through in-market transactions, First Union expects to achieve significant cost savings when the conversion of the acquired systems is complete.
 First Union will assist South Carolina Federal employees through extensive training activities, career counseling and the establishment of a talent pool, to help them find positions within the First Union organization wherever possible.
 "Our substantial experience with the merger process will help us make the transition a smooth one for customers and employees as we combine our two companies," Tate said.
 The consolidation is expected to be completed by April 30, 1993, at which time the signs at South Carolina Federal offices will change to First Union.
 First Union National Bank of South Carolina, a subsidiary of First Union Corporation, is based in Greenville and operates 54 banking offices in more than 32 communities across the state. The combined South Carolina bank will have total assets of approximately $2.4 billion, deposits of $1.7 billion and 86 branch offices. First Union Corporation reported assets of $48.1 billion as of March 31, 1992, with 1,018 banking offices in Florida, North Carolina, South Carolina, Georgia and one banking office in Tennessee, and 207 nonbanking offices in 36 states.
 First Union and South Carolina Federal officials will hold a news conference Thursday at 12:30 p.m. at the Capitol City Club, Salon C Ballroom, 1201 Main Street in Columbia.
 Media contacts are Donna Stockton and Jeep Bryant at 704-374-2957. Investor contacts are Barbara Massa at 704-374-2555 and Maggie Norris at 704-374-4353.
 Reasons for the Acquisition
 (1) The acquisition moves First Union of South Carolina into
 third place market share in the state.
 (2) The acquisition is estimated to have a positive
 contribution to First Union's earnings within 12 months.
 (3) The acquisition offers potential cost savings of up to 35
 percent because it is an in-market transaction.
 (4) South Carolina Federal and First Union have similar
 business philosophies about credit and loan and deposit
 pricing. First Union's middle market commercial lending
 expertise, along with a strong commitment to consumer
 banking, combines well with South Carolina Federal's
 strong retail consumer focus.
 South Carolina Federal Agreement
 Accounting Treatment: Pooling of interests
 Total Price: $78.7 million(a)
 Method of Payment: .76 shares of First Union Corporation common
 stock for each share of South Carolina Federal
 Price/Book Value: 1.43 X(a)
 Estimated Closing Date: By December 31, 1992.
 Number of First Union Shares to be Issued: Approximately 2.1
 million
 Number of First Union Shares Outstanding as of May 31, 1992: 132.3
 million
 Estimated Date of Integration: April 30, 1993
 Combined Assets (First Union and South Carolina Federal): $49
 Billion.
 Combined Assets in South Carolina: $2.4 Billion
 Combined branches: South Carolina 86, First Union Corporation
 1,051 (923 after the Southeast and the 1991 and 1992 RTC
 transactions are consolidated).
 (a)Based on First Union's June 10, 1992, closing price.
 Market Share Information:
 -- 4-state region: Market share increases to 16 percent from
 15.67 percent in the 4-state region. Ranking remains second.
 -- South Carolina: Market share increases to 8.75 percent from
 5.21 percent. Ranking increases to third from fifth in the
 state.
 -- Columbia MSA: Market share increases to 9.8 percent from 2
 percent. Ranking increases to third from tenth.
 -- York County (Rock Hill): Market share increases to 20.4 percent
 from 6.7 percent. Ranking increases to second from sixth.
 -- Hilton Head MSA (Beaufort County): Market share increases to
 10.4 percent from 6.0 percent. Ranking increases to third from
 sixth.
 -- Charleston MSA: Market share increases to 6.5 percent from 3.4
 percent. Ranking remains fifth.
 -- Source: Bancpen Marketing Penetration Analysis for 4-state and
 South Carolina market share, banks only (12/31/91) and Decision
 Resource Sciences for County and MSA market share, banks and
 S&L's(6/30/90).
 South Carolina Federal Statistics:
 Headquarters: Columbia, South Carolina
 Major Markets: Columbia (Richland & Lexington Counties) and Rock
 Hill (York County)
 Assets: $ 917 million
 Loans:
 Residential Mortgages: $314 million
 Commercial Real Estate: $166 million
 Commercial: $134 million
 Consumer Loans: $112 million
 Total Loans: $726 million
 Deposits: $674 million
 Equity: $52 million
 Branches: 32 Employees: 425
 Healthy Savings & Loan - capital ratios above current minimums
 Source: South Carolina Federal March 31, 1992
 -0- 6/11/92
 /CONTACT: Media Contact - Jeep Bryant, 704-374-2957 (work) or 704-335-0415 (home); Investor Contact - Barbara Massa, 704-374-2555 or Maggie Norris 704-374-4353, all of First Union Corporation/
 (FTU SCFB) CO: First Union Corporation; South Carolina Federal Corporation ST: North Carolina, South Carolina IN: FIN SU: TNM ERN


DF -- CH002 -- 9080 06/11/92 08:20 EDT
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Date:Jun 11, 1992
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